2013 (4) TMI 544

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.... :- This appeal filed by the assessee is directed against the order of the Ld.CIT(A)-6, Mumbai dated 30.09.2011 for the assessment year 2007-08. 2. In this appeal the assessee has raised the following grounds: "1. On the facts and circumstances of the case and in law Ld.CIT(A) erred in confirming the order of the assessing officer in assessing Interest income as 'Income from Other sources....

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....id income and thereby arrived at the business loss of Rs.2,92,787/- for the Assessment Year 2007-08. 3.1 In the assessment framed u/s 143(3), the AO treated the interest income on fixed deposit under the head 'income from other sources' on the basis that there was no other income credited from the business activity and the assessee did not carry out any business during the year. Further, the AO....

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....e business activity except the income from interest on term-deposit with the Bank. It has further been stated that even if the interest income is treated as income from other sources, the assessee is entitled to set off its business expenditure against such income under section 71 of the I.T.Act. In support of this argument, the Ld.AR has relied on the decision of the Punjab and Haryana High Court....

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....ion with the earning of interest income. At the same time it is noticed that there can be no denial of deduction towards expenses incurred during the course of business if the transactions actually do not take place. When the assessee is held to be carrying on its business, the deduction for expenses generally incurred for its business cannot be denied simply because its efforts to fetch the busin....